The Inspector-General of Taxation (IGT), Mr Ali Noroozi, today announced terms of reference for his review into the administration of the Pay As You Go (PAYG) instalments system with respect to individual taxpayers and called for submissions.
The PAYG instalments system aims to assist taxpayers meet their annual tax obligations and avoid large tax bills by requiring periodic reporting and pre-payment of certain tax liabilities. Individual taxpayers reporting $4,000 or more of gross business and/or investment income are automatically entered into the system. This accounts for 71 per cent of all taxpayers (2,090,379) who were in the PAYG instalments system in the 2014-15 financial year.
"Individuals make up 71% of all taxpayers in the PAYG instalments system," said Mr Noroozi. "My review will focus on issues faced by these individuals and explore opportunities to improve their experience as well as ensuring the right payments are made at the right time," he said.
The IGT has identified the key areas of concern through taxpayer complaints and submissions to his work program. The synergy between the IGT's complaint handling service and the broader review function are being realised in conducting this targeted review.
"Individuals are automatically entered in the PAYG instalments system based on last year's tax return," said Mr Noroozi. "A one-off spike in income in a particular financial year may unnecessarily draw individuals into the system," he said.
Taxpayers may be unaware that they have been entered into the PAYG instalments system which can result in unexpected tax debts and collection action.
"Affected taxpayers have raised a range of concerns about the difficulties they face in navigating the system which may result in tax debt errors and delayed refunds," said Mr Noroozi.
The terms of reference for this review are available on the IGT website. Submissions will be treated as confidential and are due by 30 April 2017.
"My aim for this targeted review is balanced thinking and achieving improved taxpayer experience whilst maintaining revenue flows," said Mr Noroozi.
29 March 2017
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